President Gen. Pervez Musharraf bade farewell to the military Tuesday, a day before he steps down as army chief and restores Pakistan to civilian rule in an effort to ease the country's political crisis.

Former Prime Minister Nawaz Sharif, whom Musharraf ousted in a 1999 coup, said the president's departure from the army would make "a lot of difference," but insisted he needed to do much more to defuse tensions. Relinquishing the post of army chief has been a key demand of an increasingly adamant opposition to Musharraf both at home and abroad.

A guard of honor of about 150 army, navy and air force troops stood to attention as Musharraf arrived at the army headquarters in the garrison city of Rawalpindi. The colonial-style complex contains Musharraf's office.

A military band played the national anthem as a grim-faced Musharraf, wearing a green-and-white sash over his uniform and a row of medals on his chest, inspected the troops on a small parade ground.

He held a brief closed-door meeting with other senior commanders, then traveled to the head offices of the navy and air force in the nearby capital, Islamabad.

He made no comment to reporters allowed to watch some of the events.

Musharraf, who has dominated Pakistan for nearly eight years, has faced growing opposition since March, when he tried unsuccessfully to fire the country's top judge.

The turmoil intensified when he declared emergency rule earlier this month and launched a crackdown on critics in the opposition and the media.

The general has purged the courts and quickly obtained a Supreme Court ruling validating his victory in a disputed presidential election last month.

Musharraf faces strong criticism from two key opponents — Sharif and Benazir Bhutto — both former prime ministers who have returned from exile in time for Jan. 8 parliamentary elections.

Sharif, speaking to reporters at his home in the eastern city of Lahore, said Tuesday "it will make a lot of difference" if Musharraf gives up his military post.

However, Sharif said Musharraf must also lift the emergency and reinstate the ousted judges in order to ensure the elections are fair — a condition the president is highly unlikely to meet.

Sharif and Bhutto both registered Monday to run in the election but, like other smaller opposition groups, they have threatened to boycott the vote to undermine its legitimacy.

Aides to Musharraf have announced that he will retire on Wednesday as chief of Pakistan's army, whose generals have ruled the country for most of its 60-year independence.

Gen. Ashfaq Kayani, a former chief of the country's powerful intelligence service and close associate of Musharraf, is to replace him.

Kayani is widely expected to maintain the army's pro-Western policies and a government spokesman said the switch would bring no change in Pakistan's determination to fighting terrorism.

"Uniform or no uniform, it would not impact our war on terror," Interior Ministry spokesman Javed Iqbal Cheema said.

The United States and its allies are backing opposition calls for Musharraf to restore the constitution and ensure a fair election, which they hope will produce a moderate government willing to keep fighting Islamic extremism.

Musharraf has already made a string of concessions, freeing thousands of detained opponents and allowing all but one independent TV news channel to resume its broadcasts.

Still, he has suggested that the emergency will remain in place until after the elections.

Sharif, who returned from Saudi Arabia on Sunday, has appeared on U.S. television news programs to stress that he would be tough on violent extremists, should he return to power.

Now he is seeking to distinguish himself from Musharraf, who many Pakistanis deride as a stooge of the Bush administration.

Sharif told supporters during his homecoming procession that as premier he had ignored U.S. advice not to conduct atomic bomb tests that made Pakistan a nuclear power in 1998.

Such nationalist posturing could entice some voters away from Bhutto, who has wooed America, Pakistan's biggest sponsor, by suggesting she might let U.S. troops strike at Osama bin Laden if he is located on Pakistani territory.

However, it is unclear whether Sharif will be able to assemble a slate of candidates strong enough to challenge the pro-Musharraf ruling party or Bhutto's party in the vote.